STANDARD OIL CO. v. PECK, TAX COMMISSIONER, ET AL.
No. 184
Supreme Court of the United States
Argued January 3-4, 1952.—Decided February 4, 1952.
342 U.S. 382
Isadore Topper argued the cause for appellees. With him on the brief were C. William O‘Neill, Attorney General of Ohio, Robert E. Leach, Assistant Attorney General; Frank T. Cullitan and Saul Danaceau.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
Appellant, an Ohio corporation, owns boats and barges which it employs for the transportation of oil along the
The Tax Commissioner of Ohio, acting under
Under the earlier view governing the taxability of vessels moving in the inland waters (St. Louis v. Ferry Co., 11 Wall. 423; Ayer & Lord Tie Co. v. Kentucky, 202 U. S. 409; cf. Old Dominion S. S. Co. v. Virginia, 198 U. S. 299), Ohio, the state of the domicile, would have a strong claim to the whole of the tax that has been levied. But the rationale of those cases was rejected in Ott v. Mississippi Barge Line Co., 336 U. S. 169, where we held that vessels moving in interstate operations along the inland waters were taxable by the same standards as those which Pullman‘s Car Co. v. Pennsylvania, 141 U. S. 18, first applied to railroad cars in interstate commerce. The formula approved was one which fairly apportioned the tax to the commerce carried on within the state. In that way we
The Ott case involved a tax by Louisiana on vessels of a foreign corporation operating in Louisiana waters. Louisiana sought to tax only that portion of the value of the vessels represented by the ratio between the total number of miles in Louisiana and the total number of miles in the entire operation. The present case is sought to be distinguished on the ground that Ohio is the domiciliary state and therefore may tax the whole value even though the boats and barges operate outside Ohio. New York Central R. Co. v. Miller, 202 U. S. 584, sustained a tax by the domiciliary state on all the rolling stock of a railroad. But in that case it did not appear that “any specific cars or any average of cars” was so continuously in another state as to be taxable there. P. 597. Northwest Airlines, Inc. v. Minnesota, 322 U. S. 292, allowed the domiciliary state to tax the entire fleet of airplanes operating interstate; but in that case, as in the Miller case, it was not shown that “a defined part of the domiciliary corpus” had acquired a taxable situs elsewhere. P. 295. Those cases, though exceptional on their facts, illustrate the reach of the taxing power of the state of the domicile as contrasted to that of the other states. But they have no application here since most, if not all, of the barges and boats which Ohio has taxed were almost continuously outside Ohio during the taxable year. No one vessel may have been continuously in another state during the taxable year. But we do know that most, if not all, of them were operating in other waters and therefore under Ott v. Mississippi Barge Line Co., supra, could be taxed by the several states on an apportionment basis. The rule which permits taxation by two or more states on an apportionment basis precludes taxation of all of the property by the state of the domicile. See Union Transit Co. v. Kentucky, 199 U. S. 194. Otherwise there would be multiple taxation of interstate operations and the tax would have no relation to the opportunities, benefits, or protection which the taxing state gives those operations.
Reversed.
MR. JUSTICE BLACK dissents.
MR. JUSTICE MINTON, dissenting.
I assume for the purposes of this dissent that none of the vessels in question were within Ohio during the tax year, and that they were taxed to their full value by Ohio. The record shows that the vessels were all registered in Cincinnati, Ohio, as the home port, and that Ohio is the domicile of the owner. Ohio claims the right to tax these vessels because they have not acquired a tax situs elsewhere than their home port and domicile.
Seagoing vessels have always been taxable at the domicile of the owner. Southern Pacific Co. v. Kentucky, 222 U. S. 63; Morgan v. Parham, 16 Wall. 471; Hays v. Pacific Mail S. S. Co., 17 How. 596. This same rule has been applied to vessels engaged in commerce between the different states. Transportation Co. v. Wheeling, 99 U. S. 273; St. Louis v. Ferry Co., 11 Wall. 423. The only exception to the rule until today was that where vessels had acquired a situs for taxation in some other state, that other state might tax them. Old Dominion S. S. Co. v. Virginia, 198 U. S. 299. In Ayer & Lord Tie Co. v. Kentucky, 202 U. S. 409, 421 (1906), this Court said:
“The general rule has long been settled as to vessels plying between the ports of different States, engaged in the coastwise trade, that the domicil of the owner is the situs of a vessel for the purpose of taxation, wholly irrespective of the place of enrollment, subject, however, to the exception that where a vessel
engaged in interstate commerce has acquired an actual situs in a State other than the place of the domicil of the owner, it may there be taxed because within the jurisdiction of the taxing authority.”
In the case at hand, the vessels had not acquired a situs for taxation in any other state. They were at large in the Ohio and Mississippi Rivers, touching ports therein from time to time. There was no showing as to how much time any of the vessels spent in any state. Indeed, the time spent in any state by the vessels plying the Mississippi River could not be shown with any accuracy, as the states on each side own to the middle of the stream.* The navigation channel might be on either side of the center line or right on the center line. Who is to say what state the vessels were in?
The doctrine of apportionment applied in Ott v. Mississippi Valley Barge Line Co., 336 U. S. 169, is not in point. In that case the domiciliary state had not sought to tax the vessels. The tax was approved in the Ott case only on the assurance of the Louisiana Attorney General that the taxing statute “was intended to cover and actually covers here, an average portion of property permanently within the State—and by permanently is meant throughout the taxing year.” Ibid., at 175. Without such assurance there would have been no basis for applying the apportionment rule. New York Central R. Co. v. Miller, 202 U. S. 584; Pullman‘s Palace Car Co. v. Pennsylvania, 141 U. S. 18, 26; Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194, 206.
The record in this case is silent as to whether any proportion of the vessels were in any one state for the whole
Southern Pacific Co. v. Kentucky, supra, is a case in point. There the owner of the vessels was a Kentucky corporation which operated between various coastal ports. None of the vessels were ever near Kentucky, but Kentucky was allowed to tax them because it was the state of the owner‘s domicile. The vessels were in and out of other states’ ports, just as the instant vessels were in and out of other states’ ports; but the mere possibility that some other state might attempt to levy an apportioned tax on the vessels was not permitted to destroy Kentucky‘s power to tax. The crucial fact was that the vessels were not shown to have acquired a tax situs elsewhere.
As recently as 1944 this Court would seem to have added vitality to the doctrine which should govern this case. Minnesota had taxed an airline on the full value of its airplanes, including those used in interstate commerce. MR. JUSTICE FRANKFURTER, announcing the judgment of the Court upholding the tax, stated:
“The fact that Northwest paid personal property taxes for the year 1939 upon ‘some proportion of its full value’ of its airplane fleet in some other States does not abridge the power of taxation of Minnesota as the home State of the fleet in the circumstances of the present case. The taxability of any part of this fleet by any other State than Minnesota, in view of the taxability of the entire fleet by that State, is not now before us. It . . . is not shown here that a defined part of the domiciliary corpus has acquired a permanent location, i. e., a taxing situs, elsewhere.” Northwest Airlines v. Minnesota, 322 U. S. 292, 295.
The majority today seeks to distinguish the earlier cases by magnifying the relevance of the continuous absence of the vessels from the domiciliary state. But the operative fact of the earlier cases was the absence or presence of another taxing situs. Where no other taxing situs was shown to exist, the state of the domicile was permitted to tax, irrespective of the amount of time the vessels were present in that state. Southern Pacific Co. v. Kentucky, supra.
As it is admittedly not shown on this record that these vessels have acquired a tax situs elsewhere, Ohio should be permitted to tax them as the state of the owner‘s domicile. I would affirm.